Joann Inc., the Ohio-based crafts retailer, has filed for Chapter 11 bankruptcy protection for the second time in less than a year. The company is seeking to sell itself to another company in an effort to 'maximize the value of its business'. Interim CEO Michael Prendergast said that the company has been facing a challenging retail environment, with declining sales and constrained inventory levels.
Joann Inc. , the Ohio-based crafts retailer, has once again filed for Chapter 11 bankruptcy protection, marking the second time in less than a year that the company has sought this legal safeguard. This time, however, Joann is not only attempting to navigate its financial difficulties but is also actively pursuing a sale to another company in a bid to 'maximize the value of its business.
' Interim CEO Michael Prendergast outlined the challenging retail landscape the company has been facing, citing declining sales and constrained inventory levels as key contributing factors to the decision to file for bankruptcy protection once more in the U.S. Bankruptcy Court for the District of Delaware. In March 2024, Joann initially filed for Chapter 11 after 81 years in business, transitioning into a private company. At that time, the company opted not to close any of its over 800 locations spread across 49 states. Now, Prendergast stated that after a thorough evaluation of all available strategic options, the company has concluded that initiating a court-supervised sale process is the most effective way to preserve the business's value. He expressed hope that this process would lead to a solution allowing Joann to continue operating as a viable entity.To achieve this goal, the company has announced its intention to seek court approval to initiate a sale process for substantially all of its assets to Gordon Brothers Retail Partners LLC. Gordon Brothers would act as the 'stalking horse' bidder, committing to an initial bid for the company's assets, often preceding a formal auction. According to Joann, Gordon Brothers has signaled its intention to pursue a liquidation of the company, conducting going-out-of-business sales at all store locations. However, the company remains open to alternative bids and has indicated receiving inquiries from parties interested in maintaining the ongoing operation of both the physical stores and online businesses. If other qualified bids emerge during the court-supervised sale process, Joann intends to conduct an auction or auctions, with the stalking horse bid establishing the baseline. In the meantime, the company assures customers that all stores will remain open, its online store will continue operating as usual, and employees will continue to receive their salaries and benefits
BANKRUPTCY RETAIL JOANN INC. SALE LIQUIDATION
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